Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2022.

Third Quarter Results

Revenue for the third fiscal quarter increased 37% to $11,138,000 from $8,112,000 for the same quarter of fiscal 2021. Distribution revenue increased 147% to $3,620,000 from $1,467,000 last year. Testing services revenue increased 26% to $4,417,000 from $3,504,000 a year ago. Manufacturing revenue decreased 1% to $3,097,000 compared to $3,130,000 last year.

Gross margin increased 20% to $2,474,000 compared to $2,060,000 for last year’s third quarter, reflecting improved margins in the Company’s testing and distribution segments, offset by lower margins in manufacturing.

Total other income was $96,000, compared to $248,000 in the same quarter last year. In the third quarter this year, government grants to offset the negative impact of the COVID-19 pandemic were $Nil, compared to $107,000 in similar governmental grants in the same quarter last year.

The net loss attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2022 was $167,000, or $0.04 per share, which includes non-cash stock compensation expenses of $433,000. This compares to net income of $178,000, or $0.04 per diluted share, including non-cash stock compensation expenses of $129,000, for the same quarter last year.

Nine Months Results

For the first nine months of fiscal 2022, revenue increased 39% to $32,231,000 compared to $23,154,000 for the first nine months of fiscal 2021, reflecting a 40% increase in testing services revenue to $13,983,000 from $10,018,000, a 112% increase in distribution revenue to $8,038,000 from $3,790,000, and a 9% increase in manufacturing revenue to $10,187,000 from $9,324,000.

Gross margin for the first nine months of fiscal 2022 increased 57% to $8,543,000, or 27% of revenue, from $5,448,000, or 24% of revenue, for the first nine months last year.

General and administrative expenses increased to $6,305,000, or 20% of revenue, for the first nine months of fiscal 2022 from $5,245,000, or 23% of revenue, for the same period last year, while total operating expenses increased to $7,047,000, or 22% of revenue, from $5,877,000, or 25% of revenue.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2022 was $1,605,000, or $0.38 per diluted share, compared to $405,000, or $0.10 per diluted share, for the first nine months of fiscal 2021.

Shareholders' equity at March 31, 2022 was $28,120,000, or $6.98 per outstanding share, compared to $25,634,000, or $6.55 per outstanding share, at June 30, 2021. There were approximately 4,029,180 common shares outstanding at March 31, 2022.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We were required to close our facility in Tianjin, China for several days in January in compliance with the city government’s lockdown measures for mandatory testing of residents under China’s ZERO-COVID policy. We resumed full operations in Tianjin on January 21, 2022. This temporary shut-down resulted in lost revenue for the fiscal third quarter of approximately $260,000. Despite this, we posted sharp revenue gains in our testing services and distribution operations for the third quarter, typically the weakest quarter of our fiscal year, which is an encouraging sign of improving business conditions for our customers and their gradual recovery from the effects of the pandemic. We are cautiously optimistic about the business outlook for the fourth quarter.”

Yong added, “During the third quarter, we established our new joint venture company, Trio-Tech (Jiangsu) Co. Ltd. to provide sub-contract services to semiconductor and other electronics industries, primarily in Suzhou, China. While this joint venture has commenced operations and recently signed its first customer contract, it is not expected to contribute substantially to operating results in the current fiscal year.

“The Board of Directors would like to thank and congratulate our Chief Financial Officer, Mr. Victor Ting, upon his retirement next month, for his many years of service and innumerable contributions to the Company. His valuable knowledge will continue to benefit Trio-Tech as he serves on our Board of Directors. Taking over his duties as CFO beginning in Fiscal 2023 will be Ms. Srinivasan Anitha, a Chartered Accountant and Certified Internal Auditor who has worked closely with the Company and its management for the past 15 years. We believe her thorough knowledge and experience of our business and background will be a significant asset as we work to improve operating margins and drive increased shareholder value in the coming years,” he said.

About Trio‑Tech

Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarter in Singapore. Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Our subsidiary locations include Tianjin, Suzhou, Chongqing in China, as well as Kuala Lumpur Malaysia and Bangkok Thailand. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at triotech.com and www.universalfareast.com.

Forward Looking Statements

This press release contains statements that are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company's products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company's products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; public health issues related to the COVID-19 pandemic; trade tension between U.S. and China and other economic, financial and regulatory factors beyond the Company's control. Other than statements of historical fact, all statements made in this Quarterly Report are forward looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future financial results and condition. In some cases, you can identify forward looking statements by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "estimates," "potential," "believes," "can impact," "continue," or the negative thereof or other comparable terminology. Forward looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.

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